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Government May Weigh Easing Controls on Rice Exports


Published Date: May 15, 2024
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Are you looking to Rice Importers ? Given the surplus of rice supplies and the predicted "above normal" rainfall that will probably encourage more paddy planting during the season of kharif, the government might want to consider easing the limitations placed on rice exports the previous year. The government will evaluate the kharif paddy seeding, which is anticipated to start next month, before deciding whether or not to lift the export restrictions. An official stated, “We need to look at lifting restrictions on rice shipments as kharif crop prospects look bright.”

Monsoon Onset Signals Start of Kharif Paddy Sowing

As the monsoon season begins over the coast of Kerala the next month, kharif paddy, which accounts for 80% of the nation's rice production, is sown between the months of June and July as the nation's rainy season advances. With 90% of the rain falling in the "normal-to-excess" category, IMD predicted "above normal" rainfall from June to September of this year last month. The previous year's uneven and below-average precipitation had a negative impact on rice yield. 

Rice Price Inflation Expected to Ease Despite Double-Digit Rise

It is a good time for sellers to sell rice in bulk as retail rice prices increased by 12.69% year over year. The Food Corporation of India (FCI) has sufficient rice inventories, amounting to 53.19 million tonnes, over four times the buffer for July 1, despite a 7% decline in procurement. 1.5 million tonnes of rice have already been purchased by FCI; of that amount, 0.71 million tonnes were removed from storage for sale to the public at ₹29/kg.

Despite Export Restrictions, India Remains a Major Player in Global Rice Market

In an effort to stabilise domestic supplies and rein in price increases, the government placed a number of limitations on rice exports last year. This included putting a 20% tax on shipments of parboiled rice after initially outlawing the export of white rice. On request, however, exceptions were granted to fulfil needs for food security. Right now, exports of aromatic Basmati rice are subject to a $950/tonne minimum price requirement. With almost 40% of the 52–54 MT yearly worldwide trade volume, India continues to be the world's biggest rice exporter in spite of these efforts. This can be a golden opportunity for sellers looking to export rice in bulk, to get a foothold in the B2B rice industry in the near future.

Government's Rice Stocks Remain Robust Amidst Lower Procurement

In the 2023–24 season, government agencies have purchased around 68.59 MT of paddy, which is equal to 45.95 MT of rice. This is a 7% decline from the same period the previous year. In order to further strengthen grain reserves, they want to buy about 10 MT of rice during the current rabi marketing season, mainly in Odisha, Telangana, Tamil Nadu, and Andhra Pradesh. 56.87 MT of rice were purchased by the government for the 2022–2023 season. To provide rice to 800 million beneficiaries under the Pradhan Mantri Garib Kalyana Anna Yojana, FCI needs about 40 MT of rice every year.

Conclusion

In conclusion, the government should think about loosening limits on rice exports given the favourable forecast for the kharif paddy season and substantial supplies of the grain. The possibility of a favourable monsoon combined with excess grain stocks makes this a good time to assess export regulations. In spite of earlier restrictions, India is still a major player in the world rice market. Furthermore, the government's rice reserves are still sizable due to strong procurement activities under progress, guaranteeing millions of recipients access to food.

If you want to import or Export Rice in Bulk, Tradologie.com is the best B2B platform. It facialites the bulk transactions without any middlemen through its state-of-the-art SaaS platform. 

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